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61. The Role of the Private Sector in Catalyzing Inclusive Economic Opportunities in the Northern Triangle

Author:
Maria Fernanda Bozmoski and Domingo Sadurní
Publication Date:
03-2021
Content Type:
Policy Brief
Institution:
Atlantic Council
Abstract:
As in every democratic country in the world, the private sector in Central America’s Northern Triangle (Guatemala, Honduras, and El Salvador) has a central role in generating employment, driving economic growth, and spurring innovation. But in a region plagued by one of the highest levels of economic informality, weak government institutions, and pervasive corruption, private enterprises—both decades-old industry behemoths and newer startups—can have a more positive influence in steering the Northern Triangle toward inclusive and sustainable economic development. This is not to say that business leaders in Guatemala, Honduras, and El Salvador have been absent in unlocking growth and innovation in the countries, especially since the end of the civil wars in the late 1990s. But in this unique moment of global crisis and renewed attention from the United States, the Northern Triangle’s private sector should seize the opportunity to further position itself as a committed, trusted partner and galvanizing force for positive change. Seeking to address the root causes of unauthorized migration to the United States—including lack of quality economic opportunities, weak rule of law, and violence—the Biden administration’s four-year, $4-billion plan for the Northern Triangle seeks to implement a whole-of-society approach to improve the living conditions of Guatemalans, Hondurans, and Salvadorans. The plan comes at a time when Central America, already reeling from structural institutional challenges to its ability to govern and improve its economies, grapples with the effects of the COVID-19 pandemic and two back-to-back hurricanes. As conditions deteriorate on the ground and create additional push factors for would-be migrants, the US government should devote special energy and attention to laying the groundwork for strategic partnerships with private sector actors who are positioned—despite contending with pandemic-induced burdens of their own—to catalyze economic opportunities for their fellow citizens. The business community can be a pivotal player in long-term change that seeks to improve the rule of law, tackle corruption, and open new opportunities for inclusive economic growth. This issue brief takes a deep dive to unpack why a lack of sustained and inclusive economic opportunities—among the three main drivers of unauthorized migration—have eluded the Northern Triangle and how the private sector can help reduce informality, invest in employment-generating sectors, resolve the human capital paradox, and catalyze greater infrastructure investment and digital connectivity.1 While there is an emphasis on high levels of informality causing economic insecurity, it is also true that economic insecurity and lack of investment in economic development also drives informality. This is the first of three issue briefs as part of the Adrienne Arsht Latin America Center’s latest Central America initiative, in partnership with the DT Institute, to inform and mobilize key stakeholders at the national, regional, and international levels behind new policy solutions to tackle the Northern Triangle’s most pressing issues. This issue brief is the outcome of a meeting with the Center’s Northern Triangle Advisory Group, which met in February 2021, and will meet regularly during the first six months of 2021 to help inform the three issue briefs.
Topic:
Migration, Entrepreneurship, Economic Growth, Private Sector, and Inclusion
Political Geography:
Central America, Honduras, Guatemala, and El Salvador

62. Scalable Early Warning Systems for School Dropout prevention: Evidence from a 4.000-School Randomized Controlled Trial

Author:
Francisco Haimovich, Emmanuel Vazquez, and Melissa Adelman
Publication Date:
08-2021
Content Type:
Working Paper
Institution:
Center for Distributive, Labor and Social Studies (CEDLAS)
Abstract:
Across many low- and middle-income countries, a sizable share of young people drop out of school before completing a full course of basic education. Early warning systems that accurately identify students at risk of dropout and support them with targeted interventions have shown results and are in widespread use in high-income contexts. This paper presents impact evaluation results from an early warning system pilot program in Guatemala, a middle-income country where nearly 40 percent of sixth graders drop out before completing ninth grade. The pilot program, which was implemented in 17 percent of Guatemala’s primary schools and largely leveraging existing government resources, reduced the dropout rate in the transition from primary to lower secondary school by 4 percent (1.3 percentage points) among schools assigned to the program, and by 9 percent (3 percentage points) among program compliers. Although the effect size is relatively modest, the low cost of the program (estimated at less than US$3 per student) and successful implementation at scale make this a promising and cost-effective approach for reducing dropout in resource-constrained contexts like Guatemala.
Topic:
Education, Management, Schools, Dropout Prevention, Early Warning, and Impact Evaluation
Political Geography:
Central America and Guatemala

63. Migration Management and Changes in Mobility Patterns in the North and Central American Region

Author:
Lauren Faret, Maria Eugenia Anguiano Tellez, and Luz Helena Rodriguez-Tapia
Publication Date:
05-2021
Content Type:
Journal Article
Journal:
Journal on Migration and Human Security
Institution:
Center for Migration Studies of New York
Abstract:
Since the beginning of the twenty-first century, changes have occurred in the regional dynamics of international migration and in the ways governments manage human mobility. This article argues that the migratory system connecting the three northern countries of Central America (Guatemala, El Salvador, and Honduras) with Mexico and the United States has not been accompanied by regional management of migratory flows. Instead, a succession of government plans and projects reveals a perspective marked by the effects of the “externalization” of US borders, leading to more complex migration routes and increased vulnerability of migrants. The article discusses how externalized control policies influence migratory spaces, routes, and timelines, and leave many stranded in transit countries before they eventually arrive at their intended destinations. Reconsidering the process of mobility in light of migration management policies would appropriately enlarge the traditional economic, social, cultural, and environmental factors that affect migration strategies.
Topic:
Migration, Mobility, Local, and Freedom of Movement
Political Geography:
Central America and North America

64. When Internal Migration Fails: A Case Study of Central American Youth Who Relocate Internally Before Leaving Their Countries

Author:
Angel Alfonso Escamilla Garcia
Publication Date:
09-2021
Content Type:
Journal Article
Journal:
Journal on Migration and Human Security
Institution:
Center for Migration Studies of New York
Abstract:
This paper examines the experiences of Central American youth who have attempted internal relocation before migrating internationally. Based on interviews and participant observation with Guatemalan, Honduran, and Salvadoran youth migrating through Mexico, this paper shows how youth from the Northern Countries of Central America turn to their domestic networks to escape labor exploitation and gang violence before undertaking international journeys. The paper further demonstrates how those domestic networks lead youth into contexts of poverty and violence similar to those they seek to escape, making their internal relocation a disappointment. The failure of their internal relocation attempts makes them turn to international migrant networks as their next option. This paper sheds light on the underexplored issue of internal migration among Central American youth and that migration’s synergy with Central American youths’ migration to the United States. The paper finds that internal relocation is unsuccessful when the internal destination fails to resolve the issues from which youth are attempting to escape. This failure ultimately triggers their departure from their home country.
Topic:
Migration, Immigrants, Youth, and Internal Displacement
Political Geography:
Central America and North America

65. Extraregional Migratory Flows in Transit as Complex Unbounded Emergency (Risk): Conceptual Challenges and Empirical Lessons in Costa Rica

Author:
Juan C. Mendez
Publication Date:
12-2021
Content Type:
Journal Article
Journal:
Journal on Migration and Human Security
Institution:
Center for Migration Studies of New York
Abstract:
Recent migratory flows transiting through Central America have led to unprecedented institutional and humanitarian responses across the sub-region. Between 2015 and 2016, the small Central American countries and Costa Rica in particular experienced at least two major “migration waves,” triggered by thousands of “extraregional migrants” in transit from Cuba, Haiti, and many countries from Asia and Africa who became stranded for months in Central America. The article examines how these recent and unusual migratory flows led to novel state responses, including the use of disaster risk management principles and operational mechanisms. Based on empirical data from Costa Rica, the article explores how the concept and notion of complex unbounded emergency (risk) may be appropriate in understanding the practical implications of this new migratory reality in terms of disaster risk reduction and management. It aims to shed new insights on the complexities of extraregional migratory flows, which are likely to continue into the foreseeable future.
Topic:
Migration, Risk, Humanitarian Crisis, and Disaster Management
Political Geography:
Central America, North America, and Costa Rica

66. Heterogeneous informality in Costa Rica and Nicaragua

Author:
Enrique Alaniz, T. H. Gindling, Catherine Mata, and Diego Rojas
Publication Date:
03-2021
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Informal work is often considered a place of employment for marginalized and vulnerable workers who have been rationed out of preferred formal work. However, informality can also be seen as a dynamic sector that budding entrepreneurs and those looking for flexible working conditions enter voluntarily. We use the methodology developed in Günther and Launov (2012) to test for the voluntary and involuntary nature of informal work in Nicaragua and Costa Rica, without making ad hoc assumptions about labour market segmentation and self-selection. We find evidence of heterogeneous informality in both Nicaragua and Costa Rica, with one informal sub-segment where most workers are voluntarily informal and another informal sub-segment where most workers are involuntarily informal. In Nicaragua, our results suggest that 44 per cent of wage employees are involuntarily informal, while 30 per cent of self-employed workers are involuntarily informal. In Costa Rica, our results suggest that 10 per cent of wage employees are involuntarily informal, and that 66 per cent of the self-employed are involuntarily informal.
Topic:
Labor Issues, Developing World, Informal Economy, and Workforce
Political Geography:
Central America, Nicaragua, and Costa Rica

67. Pity the Nation: Honduras Is Being Eaten from within and without

Author:
Tricontinental: Institute for Social Research
Publication Date:
04-2021
Content Type:
Working Paper
Institution:
Tricontinental: Institute for Social Research
Abstract:
Where does Honduras stand twelve years after the 2009 coup? In our dossier, jointly produced with People’s Dispatch and the Civic Council of Popular and Indigenous Organisations of Honduras (COPINH), we look at the coup against progressive leader and President Manuel Zelaya and the prolonged violence in the country in the years since by examining the assassination of Berta Cáceres, the forced disappearances of five members of the Garifuna community in July 2020, and the concerted attacks on trade unionism to understand the far-reaching impacts of the coup.
Topic:
Governance, Leadership, Coup, and Assassination
Political Geography:
Latin America, Central America, North America, and Honduras

68. La Riqueza Escondida de Loreto: Análisis de Complejidad Económica y Oportunidades de Diversificación Productiva

Author:
Ricardo Hausmann and Miguel Angel Santos
Publication Date:
10-2020
Content Type:
Working Paper
Institution:
The John F. Kennedy School of Government at Harvard University
Abstract:
El Laboratorio de Crecimiento de la Universidad de Harvard, bajo el auspicio de la Fundación Gordon and Betty Moore, ha desarrollado esta investigación para identificar las capacidades productivas existentes en Loreto y las actividades económicas con potencial para liderar la transformación estructural de su economía. Este reporte forma parte de una investigación más amplia – Transformación estructural y restricciones limitantes a la prosperidad en Loreto, Perú – que busca aportar insumos para el desarrollo de políticas públicas a escala nacional y regional que contribuyan a promover el desarrollo productivo y la prosperidad de la región, tomando en cuenta sus características particulares.
Topic:
Development, Economics, Diversification, and Economic Complexity
Political Geography:
Central America and Mexico

69. In the shadow of the virus Varieties of power in the COVID-19 crisis in Venezuela

Author:
Peder Østebø
Publication Date:
12-2020
Content Type:
Special Report
Institution:
Norwegian Institute of International Affairs
Abstract:
While all states face massive challenges when responding to COVID-19, some are in a more precarious position than others. In Venezuela, the pandemic arrived at the worst possible time for its citizens. Facing one of the deepest economic crises outside of wartime in recent years, its consequences have spilled over to all aspect of social life.1 However, the timing seems to have suited the leaders of the Venezuelan regime well. Rather than constituting a threat to the stability of a regime that has lost both democratic legitimacy and the capacity to provide services and security, the government of Nicolas Maduro (2013-present) has seemingly managed to consolidate itself after several years of instability. The starting point of the discussion is an apparent paradox: how can a regime with neither legitimacy nor capacity, two commonly invoked criteria for effective crisis management, strengthen itself during a crisis such as that spurred by COVID-19? The brief presents an overview of how the Venezuelan regime has responded to COVID-19, and how the government of Nicolás Maduro has applied different strategies to consolidate a favorable political status quo. It takes as its starting point three concepts, namely “state capacity,” “legitimacy,” and “power,” all of which are frequently upheld as fundamental for understanding the varying ways in which states have responded to the pandemic. It highlights how relative power relations have shifted in recent years, and how the pandemic has contributed to skewing the balance of power further in favor of the Maduro government.
Topic:
Government, Health, Crisis Management, and COVID-19
Political Geography:
South America, Central America, and Venezuela

70. Coronavirus, Oil and Latin America: The Urgency of Economic Diversification and Energy Transition

Author:
Carlos Monge
Publication Date:
08-2020
Content Type:
Policy Brief
Institution:
Natural Resource Governance Institute
Abstract:
Key messages: Companies are demanding temporary bailouts, requesting that governments subsidize them with breakeven prices over sale prices, and allow them to postpone tax and royalty payments and agreed investments. Such actions may be necessary to preserve jobs and ensure domestic energy supplies. Governments are considering lowering social and environmental standards, fast tracking procedures and providing long-term subsidies to support ongoing projects and to attract new investments. For an industry already facing its twilight, these actions are not justified. Governments must urgently move ahead with economic diversification and energy transitions to ensure the availability of jobs, energy and fiscal incomes that the oil industry currently provides.
Topic:
Energy Policy, Oil, Diversification, Renewable Energy, Coronavirus, and COVID-19
Political Geography:
Colombia, South America, Central America, Mexico, and Peru